Zomba Enterprises, Inc. v. Panorama Records, Inc.

Panorama Records, Incorporated (Panorama) (defendant) made compact disc (CD) compilations of popular songs, grouped by genre. The CDs were made for karaoke machines and included two versions of the song, one instrumental rendition and another with audible words, along with a visual file showing the words to the song in time with the music. Panorama included 26 songs on its CDs, featuring copyrights owned by Zomba Enterprises, Incorporated and Zomba Songs, Incorporated (Zomba) (plaintiffs). Zomba sent Panorama a cease-and-desist letter that included an offer for licensing terms. Panorama did not license the songs and continued to sell the karaoke CDs. Zomba sued Panorama for copyright infringement, and Panorama agreed to a consent order entered by the district court that required Panorama to stop selling CDs that infringed Zomba’s copyright interests. However, Panorama started selling the infringing CDs shortly after entry of the consent order. After Zomba moved for sanctions, the district court entered an order granting Zomba $31,000 in damages for each infringement, for a total of $806,000. The court reasoned that the statutory maximum of $30,000 per infringement for non-willful infringement was insufficient, because of Panorama’s willfully infringing conduct. However, it also found that the maximum award of $150,000 per infringement was excessive. Panorama appealed, arguing that the district court erred in applying the statutory maximum for willful infringement.